Question 1

What are the New Zealand income tax rates and brackets for the 2025 tax year?

Accepted Answer

New Zealand uses a progressive tax system with five income tax brackets. For the 2025 tax year (1 April 2024 to 31 March 2025), the individual income tax rates are:

Taxable Income  Rate

Up to NZ$15,600  10.5% 
 NZ$15,601 to NZ$53,500  17.5% 
 NZ$53,501 to NZ$78,100  30% 
 NZ$78,101 to NZ$180,000  33% 
 Over NZ$180,000  39%

These thresholds were updated on 31 July 2024 as part of personal income tax relief measures. Each rate only applies to the income that falls *within* that bracket, not

Question 2

Which tax code should I use as an employee in New Zealand (M, ME, S, SH, ST)?

Accepted Answer

When you start a new job in New Zealand, you must complete an IR330 Tax Code Declaration form and give it to your employer so they can deduct the correct amount of PAYE tax. The tax code you use depends on your situation:

Primary tax codes (for your main or only job):
 M  Main income, no student loan, no KiwiSaver deductions via employer
 ME  Main income with the Independent Earner Tax Credit (IETC) entitlement
 M SL  Main income with a student loan
 ME SL  Main income with IETC and a student l

Question 3

What is the Independent Earner Tax Credit (IETC) and am I eligible for NZ$520 per year?

Accepted Answer

The Independent Earner Tax Credit (IETC) is a tax credit worth up to NZ$520 per year (NZ$10 per week) for New Zealand tax residents who earn between NZ$24,000 and NZ$70,000 in a tax year. It is designed to support middleincome earners who do not receive government assistance.

Eligibility requirements:
 You must be a New Zealand tax resident
 Your annual income must be between NZ$24,000 and NZ$70,000
 You must not be receiving Working for Families Tax Credits
 You must not be receiving an income

Question 4

Do I need to file an individual tax return (IR3) in New Zealand?

Accepted Answer

Most New Zealand salary and wage earners do not need to file an individual tax return because tax is deducted automatically through the PAYE system. However, you must file an IR3 individual tax return if any of the following apply to you:

You are selfemployed or a sole trader
 You received rental income from property
 You received overseas income (foreign investments, pensions, or earnings)
 You received income that was not taxed at source (contract work, freelance payments)
 You earned more t

Categories

Income Tax

What are the New Zealand income tax rates and brackets for the 2025 tax year?

Which tax code should I use as an employee in New Zealand (M, ME, S, SH, ST)?

What is the Independent Earner Tax Credit (IETC) and am I eligible for NZ$520 per year?

Do I need to file an individual tax return (IR3) in New Zealand?